(Minews) - Iron ore prices are likely to rise in coming months as inefficient producers leave the market and some mines exhaust their output capacity, Vale Chief Executive Murilo Ferreira said on Wednesday.
The Brazilian mining company has no intention of delaying strategic investments even if prices of iron ore, its main product, stay where they are or fall further, Ferreira told reporters in a phone conference.
"For the first time in 10 years, supply is greater than demand," Jose Carlos Martins, head of Vale's ferrous metals division, said in the same conference. "At the same time, demand has risen slower than expected."
He added that 40 million to 50 million tonnes of iron ore capacity are leaving the market every year as mines are exhausted or because they are no longer economically viable.
So far this year, iron ore prices .IO62-CNI=SI have fallen 21 percent to $105.40 a tonne, according to Steel Intelligence and Thomson Reuters.
Vale also said nickel prices are likely to rise above $20,000 a tonne in 2015. After that, prices could rise to levels last seen in 2007, when they went above $30,000 a tonne.